Below are important clarifications on Canada’s new B-20 mortgage rules. Most of this stuff was not explicitly discussed in OSFI’s announcement yesterday. But if you’re getting a mortgage or HELOC, it’s need-to-know info. Amortization Limits:  One way to partially mitigate the new stress test is by extending your amortization. “OSFI has not included specific references to a ‘qualification’ amortization rate in its final Guideline B-20....

We all knew it was coming, but now the reality sets in. The ruler of Canadian banking (OSFI) has solidified a rule change that’ll impact more mortgagors than any rule we’ve seen to date. Here’s a synopsis I wrote for the Globe and Mail if you need a quick summary. The gist is this: Effective January 1, 2018, anyone with 20%+ equity who wants a low rate will have to prove they...

Scotiabank’s out with a new prediction. The nation’s #3 mortgage lender says rising rates will cause average mortgage carrying costs for new buyers to jump 8% in 2018 and another 4% in 2019 (assuming stable home prices). “Further rule changes, including more stringent stress tests for uninsured mortgages…would exert additional drag on new buyers,” the bank noted. Existing mortgage holders, whom the...

If Donald Trump were a regular guy with a mortgage, he’d surely be appalled by all the fake rates in the media. You just can’t take rates at face value anymore. Consider this column from our favourite personal finance author. The broker interviewed in the story (we won’t name names) quotes three variable rates: For conventional mortgages on homes of $1 million or more: ...

You’ve just made the biggest purchase of your life. After waiting months to close on your home, suddenly you’ve found yourself short $4,000. All too often, unnoticed costs catch new homebuyers by surprise. That’s despite lenders commonly requiring “proof” that you can cover your closing costs. A TD home buyers survey found that 13% of first-time buyers “overlooked some of the one-time...

For now, the days of sub-2% everyday mortgage rates are officially over. Wednesday morning’s slightly surprising 1/4-point Bank of Canada hike was the nail in that coffin. The ensuing 1/4-point bump in prime rate will push all remaining mortgage rates above the psychologically key 2% threshold. By next week, the lowest rates should jump roughly as follows: Insured variable rates:  From 1.89% to 2.14%+ Uninsured variable...

It’s been seven weeks since the Bank of Canada began its first rate hike cycle in seven years. But with its next meeting on Wednesday, will it pull the trigger again? Derivatives prices imply there’s a 50% chance it does, and a 100% chance that it hikes by October. Prime rate would jump 1/4%-pt if the BoC does move. “We narrowly favour October over September, as...

Three in five Canadians say they do “a lot” of research before choosing their mortgage, according to a recent Ipsos poll. But when it comes to mortgage renewals, too many put in too little effort. Only 42% of renewal customers claim to do a lot of mortgage research. A disappointing 1 in 5 (22%) admit to doing no research at all. That’s a real problem...

Private (non-prime) lenders are getting tapped out across the country. Fisgard Asset Management Corporation, one of Canada’s largest mortgage investment corporations (MICs), is no exception. “It’s a dynamic time right now,” says Hali Noble, SVP at Fisgard. She explains that Home Capitals’ near-failure, Equitable Bank’s funding problems and government rule tightening have spiked demand for private mortgages. The company, which manages $240 million in loans, has almost fully utilized...

Mortgage Finance Companies (MFCs) pitch themselves as a better alternative to the banks. But that’s definitely not true in all cases. Here’s one example. At the moment, certain MFCs are refusing to offer blends and increases and/or refinances to existing customers. They’re doing this despite marketing those very same “features” to the brokers who sell their mortgages, who in turn...